Which of the following statement(s) regarding performance evaluation is (are) incorrect ? When actual revenues are less
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Question:
Which of the following statement(s) regarding performance evaluation is (are) incorrect?
- When actual revenues are less than standard (budgeted) revenues, the revenue variances are favorable.
- Differences between standard (budgeted) and actual amounts are called Variances.
- Use of Return on Investment (ROI) to evaluate managers of an investment center may avoid some of the investment decision problems that can occur with the use of Residual Income (RI) as a performance measure.
A) only 3
B) 1 & 2
C) only 1
D) 2 & 3
E) 1 & 3
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